AUD/USD inches close to 0.7000 ahead of American session

• AUD/USD is posting modest daily gains following Thursday's drop.
• US Dollar Index returns to 96.00 area ahead of mid-tier data releases.
• Wall Street's main indexes look to open in the positive territory.

After starting the day above 0.7000, the AUD/USD pair lost its traction in the second half of the day and closed in the negative territory on Thursday. With the market action turning subdued on Friday, the pair is staging a rebound and was last seen gaining 0.25% on the day at 0.6986.

DXY reverses course following Thursday's rally

The sour market mood amid the surging number of coronavirus cases in the provided a boost to the safe-haven greenback on Thursday. The US Dollar Index (DXY) snapped its four-day losing streak and gained 0.27% to close at 96.30. However, improving sentiment made it difficult for the USD to preserve its strength and the DXY returned to 96.00 area, where it was down 0.27% on the day.

In the second half of the day, Housing Starts and Building Permits data will be featured in the US economic docket. Nevertheless, the market reaction is likely to be muted unless there is a big surprise in these readings and investors will remain focused on Wall Street's performance.

At the moment, the S&P 500 futures are up 0.4% on a daily basis. If major equity indexes start the last day of the week on a strong footing, we could see the pair make another attempt toward 0.700 during the American session.

Technical levels to watch for